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In this interview, Dr. Cowpland treats us to the
strategic thinking that has brought his enterprises again and again
to the forefront of the hottest technology business
opportunities.

Dr. Michael Cowpland is renowned for his commitment to
developing cutting-edge technology and his ability to foresee
trends in an industry characterized by frequent change. He is the
founder, president and CEO of Corel Corporation, the second-largest
vendor of personal productivity applications in the world.

Incorporated in 1985, Corel Corporation is recognized
internationally as an award-winning developer and marketer of
productivity applications, graphics and Internet software.

Corel Corporation was among the first large corporations to
catch the vision and potential of the Linux operating system,
announcing on May 11, 1998, its plans to develop a suite of
business applications for Linux as well as to deploy Linux on the
innovative NetWinder series of computers manufactured by its
subsidiary Corel Computers Corp.

At the Atlanta Linux Showcase in October, 1998, Dr. Cowpland
excited the Linux community by announcing that the first product in
its Linux office suite, WordPerfect 8, would be free for personal
use, stating "We believe the development of software for emerging
operating systems such as Linux will serve to create a fair playing
field for all software developers."

On December 17, 1998, Corel made good its promise and released
WordPerfect 8 for Linux for free download over the Internet. It
quickly became the top download at download.com and to date a
sensational 600,000 copies of WordPerfect 8 for Linux have been
downloaded from the Corel and other ftp sites.

I first met Dr. Cowpland at LinuxWorld Expo in San Jose,
California, March 2, 1999 at the Corel exhibit booth and we walked
briskly off the exhibit floor flanked by three of his staff and
into a meeting room in the hotel adjacent to the San Jose
Convention Center. The four of us seated ourselves around the
table. The energy level in the room was electric but everyone was
completely relaxed. Michael is a tall man in his mid fifties and
very fit. He spoke spontaneously and at length about every question
I put to him. At no time did he have to pause to think. For me, it
was an exhilerating experience.

Dwight: How did you first become interested in
Linux?

Michael: It was early last year. We were looking for an
operating system for the NetWinder and we considered QNX and a few
of the embedded systems and then one of our developers mentioned
Linux. We looked into it and the more we looked into it the better
we liked it. We looked inside the source code and couldn't believe
how clean and well written it was. So that was the initiation and
we adopted it for the NetWinder and it worked out super. Then we
went to the user group meeting in Ottawa where we launched the
NetWinder and we had very strong feedback. So at that point we had
seen enough that we could say this was going to be an operating
system of the future and we will be porting all of our applications
over to Linux.

It would have been the end of '97 when we first got into it and
then early in '98 was when we committed to porting all of our
applications and we ported WordPerfect 8 and that came out recently
and we had the 600,000 downloads and then since then we've found
that to get the next applications the best way was to greatly
increase the effort on Wine as opposed to doing them one at a time.
That way we get 90% of each app done automatically and then the
compiling enables us to tune each app a certain amount but the bulk
of the work is already done.

Dwight: So you were already planning the NetWinder? Didn't
you announce that about last May and when you did announce it you
had already made the decision for Linux?

Michael: Yes, we had to have the operating system up a long time
before that -- probably late '97.

Dwight: But that was right from the beginning planned as a
thin-client solution?

Michael: Yes, it was basically a thin-client as well as a
network computer and then it became a Linux computer.

Dwight: Didn't you think of it as Java at first?

Michael: Initially we thought it was Java running on an OS and
the OS was going to be somewhat irrelevant. And then we suddenly
found that Linux was more important than Java. So it was a
transformation.

Actually, it was funny. But it dawned on us. We thought, who
needs Java anyway? It became almost like a little frill on the
side. And that's the way it is now; we have a JVM. It's an
important tool to have -- there's a lot of MIS middleware being
written in Java. So, it's definitely got its place. But the
emphasis rapidly switched from one to the other.

Dwight: How is Linux and open-source software currently
being used in-house at Corel and what are Corel's plans for further
deployment?

Michael: We're running plenty of our servers on Linux.

Dwight: Your Web servers?

Michael: Yes, and I've got two computers on my desk. I've got
one Linux and one Windows, which is good -- first-hand networking
back and forth. And I think we'll be rolling it out on a very
rapidly increasing basis from here on out in a dual platform mode
where a lot of people will have a dual boot or just two
computers.

Dwight: Do you think it will become the primary OS for a
significant percentage of your employees?

Michael: I think it will over a period of time. It'll probably
take 18 months. We'll have all the apps so there won't be much
reason not to use it. What most people use it for is the Web and
the office suite and graphics and we'll have all of those taken
care of. So I'm sure we'll be maximizing its use. Initially it will
be parallel and then I think it will become the preferred
system.

One of the benefits of me using it first-hand is first-hand
visibility of why we needed to do our own distribution because we
could see that it is a very good system but getting it set up is
difficult. You need an expert to set it up. We'll take care of all
of that. Similarly, when you browse the network it is not as easy
as Windows right now. We'll take care of that.

We can see what's there and what's missing and there's not much
missing. We'll fill in the missing parts.

Dwight: How will Corel market the Linux versions of its
Linux products?

Michael: A combination of typical Web techniques such as the
free downloads we've offered of WordPerfect 8 which has now had
600,000. It's been a huge success. I don't think we ever thought it
would be anything like that many. And conventional distribution
where we're already selling existing Linux products through people
like Ingram and CompUSA. It's a two-pronged approach. Some people
like to have the box and the documentation and the CD-ROM. And
others don't mind doing the download. And I guess a third component
is corporate licensing where we have direct relationships with
people who buy licenses. And that would be particularly good for
new users such as the Mexican school system where they are adopting
it, as I mentioned in the keynote, for all their schools.

Dwight: I knew that Mexico was adopting Linux. So Corel is
going to supply some software?

Michael: We haven't actually finalized that but we are
definitely going to be working hard in that direction. I think the
tender is coming up in the next few months, so we are actually
actively working down there right now.

Dwight: Who is competing with you down there?

Michael: At this point, it's hard to say because you're dealing
with the Mexican government system. A lot of it will be who has the
attention of the government in being able to do the total job. I
think we will be very well positioned with our comprehensive
approach to Linux.

Dwight: How, in your view, does open-source software fit in
to the evolution of computer software in general? Is it the
direction that all software is headed or will there always be a
market for commercial, closed source software?

Michael: I think it's definitely a mixture of the two where its
like a pyramid with the bottom layers being the OS and that's the
common denominator, so everybody uses that. And that's what gets
the most benefit from the global open-source effort because every
single user has a vested interest in it being really good and
keeping it open. Once you get into specific applications, you then
fragment that effort. So that's why applications will still stay
mainly commercial except for the lightweight ones. Because groups
of open-source people can be in pockets of a certain quantity which
for the operating system becomes an aggregation that's pretty
impressive, but if you take any individual application, that's a
much smaller population that has the incentive to do it. It's very
expensive to develop a fully-fledged application like a WordPerfect
or a Quattro Pro. And you don't find that just happening easily.
And, in fact, I think a rule of thumb is that if you open-source a
project the net result is you get about 20 or 30% actual extra
developers free. It's not like 200 times more. I've talked to
people like Michael Tiemann of Cygnus who's been in open-source
since the beginning and asked him point blank -- because he's got
some open-source stuff and some not open-source -- and I said, how
do you decide which is which? Basically, its the typical
self-interest of your organization. If it makes sense to go
open-source, you do. If it doesn't make sense, you don't. It's not
particularly doctrine, it's more like pragmatic.

But I said, okay, when you do open-source, what's the net
benefit? And he said about 20 or 30%. And I have heard that before
too with the Mozilla project, because I think intuitively, when you
first hear about it, you think you're going to get thousands of
times more effort because it's the whole world. You might have 20
people working on it but there's 2,000 out there working away. It's
going to be like magic. But that's not the case. In reality, it's
all fragmented down and you get a certain cooperation and effort
and it's a bonus but it's not going to make the whole thing stand
on its own. The bottom line is you need someone who's got an
economic interest in applications to carry them forward if you need
the applications to do the extra things people want. Quite often
those extra things are not the kind of stuff that enthusiasts want
to write. They might be drivers or they might be color separation
details that might be a little boring.

It's like having the interstate highway. The highway is free but
you have shopping centers too and you don't expect all the goods to
be free in the shops.

A big developer like us, we have value and money that we can
invest, and we invest that by buying other technology and
aggregating it to the end result. And we are now doing the same
thing with open-source where we are putting a lot of actual real
money into the Wine development because it's good for us. And the
same thing with the distribution where we're vesting in that. If we
got it free, it would be fine, but in this case we need to put our
own investment in there and we've got good resources to put behind
it. But in other cases, in Windows, we have had to have commercial
arrangements. They wouldn't even allow us to make that
open-source.

The model of software is evolving anyway because of the Web
where we're doing more and more activity on the Web and that's
changing the model where more software will be free. Free download
-- and then you want people to create traffic because traffic is
worth more than applications now.

Dwight: How is the Internet changing computing and how is
Corel responding to those changes?

Michael: It's totally flipping it around and we're responding as
fast as we can because we recognize it's a completely new model.
We're immersing ourselves in the Web totally to use it in every way
possible. We're putting major investment in all areas of that.
We've actually talked to three major Web outfits in the last week
and the insights we've got are incredible. One of the comments we
got from Netscape was they said they spent four years developing
enterprise software and ended up being sold to AOL for $9 billion
as a media company because of their advertising. They were actually
showing us on their Web site where one little button for Citibank
VISA they got $60 million for. You have to sell a lot of software
to get that just for the advertising hits. So it's just flipped the
whole idea around. We're thinking free and then come to the Web
site for subscriptions, for ongoing useful stuff and that can be a
whole new model -- Free training.

Dwight: What is the revenue side of that?

Michael: Traffic. Two avenues: one is by exposing people to our
latest features, its almost like a demonstration as well as
training. They will realize what they're missing and therefore
upgrade to the latest version instead of being quite happy with
their old version. So one revenue would be quicker upgrades because
of the improved productivity that they will get. Secondly, if we
get more Web traffic, we'll have effectively more advertising
revenue if we advertise or we're advertising ourselves more.

Dwight: That's interesting because that's not really what I
was thinking when I asked the question. What I was thinking was
that Oracle has been putting forth their vision for six months now
of the fat server and just the browser on the other end. If you go
their direction, applications are going to radically change and I'm
wondering if you're seeing anything like that happening at
Corel.

Michael: Not really, no. I think we're seeing different business
models. Some of the stuff Oracle comes up with doesn't come to pass
-- like network computers.

Dwight: Certainly the Internet is causing more networking to
evolve in the use of the PC in general and you would think that
applications themselves would change.

Michael: They will be be changing but we see a different view.
XML will become a huge factor because XML gives you structure
between businesses in business to business commerce and
transactions. And that's why XML is built into WordPerfect 9, which
you can't get in Word. The Oracle model is okay if everybody is on
one server but what about business to business? You've got to go
through XML so you can talk to each other. And that needs
applications in between. It's okay if the whole world is just one
big business on one Oracle server but it would never be that
simple.

Dwight: What's the bridge with Paradox?

Michael: Actually, we expect to turn Paradox into an XML
repository because the next big thing is going to be databases
which handle XML which act as repositories and then we've got
WordPerfect as the ideal client for inputting the data and
depositing it.

Dwight: How far downstream is that new Paradox?

Michael: Probably, we'll do that this year.

Dwight: Will that be an upgrade to the current
version?

Michael: Actually version 9 is coming out which has got a lot of
Java and JDBC stuff in it coming out in April. But then the next
efforts we're going to put onto Paradox would be a refresh to
really enhance the XML part. We see that as a whole new window of
opportunity to differentiate. Because you're going to have Oracle
in as a heavy-duty XML file retriever -- very expensive -- and if
someone wants to get going on their own for the first 100 users,
then Paradox will be ideal. Built right into the Suite.

Dwight: How do you think Microsoft will respond to the
threat of a Corel-Linux desktop that is completely free of
Microsoft products?

Michael: We've always been number one in their cross-hairs with
the office suite for the last two years, so I think they are used
to us being there as a competitor. But at the same time, they are
realizing that they need a valid alternative because of anti-trust.
So they're probably not quite as predatory as they used to be.
We've now developed good co-existence where we went up 10% in users
in the last 12 months which was phenomenal news to us because they
have been trying to squish us down strongly in the last two or
three years and it hasn't worked.

Dwight: You develop all of your current products for
Windows. Could they make things difficult for you by not providing
you with information you need?

Michael: I don't think so, because they have rules they must
obey now under scrutiny from the Justice Department and we just
licensed VB8 from them for our versions 9 because it is the best
scripting tool.

Dwight: What do you think would be the best outcome of the
anti-trust action for the future of the computer industry?

Michael: I think it would be best if they were forced to have
fixed prices, I mean standard prices, so they couldn't say one
price for Dell, one price for Gateway behind closed doors if you do
this or if you don't do this. Force them out in the open so that
everything is published because they are almost like a utility. I
think splitting them up would be too complicated. But if you
basically expose everything they are doing -- it's almost got to be
like the phone company that publishes rates. Not so they couldn't
change, but at least they've got to publish them. Then there
wouldn't be so many games going on all the time of behind closed
door negotiations and nothing written down.

Dwight: From some of the developers, I've heard some
complaints that unless you play ball with Microsoft just right they
might withhold information you need. Nothing like that has
happened?

Michael: No, it hasn't happened but people are always worried
about it. I think Compaq said that they were worried that they
wouldn't get updates if they didn't play ball.

Dwight: But don't we have the entire Software Publishers
Association lined up against Microsoft on some level?

Michael: That's right.

Dwight: What's that all about?

Michael: It's about the dirty tricks. People don't like the
dirty tricks.

Dwight: But mostly marketing tricks?

Michael: Yes.

Dwight: Not on the technical side?

Michael: No. On the technical side, I think they stopped doing
that a few years back.

Dwight: There was no issue that Microsoft Word would be able
to run better on Windows than WordPerfect because you weren't
getting information?

Michael: No. We know that for a fact because with our JBridge
technology we had to X-ray the OLE APIs and I actually asked our
chief engineer doing that what about all these undocumented APIs,
the ones they're supposed to use and there truly are some
undocumented APIs but it's ones you wouldn't want to use anyway.
They are just for internal communication. I had him print them all
out and we could see they weren't sinister ones. They were just
there because they needed internal communication and there wouldn't
be any point in exposing them because you wouldn't want to use them
anyway.

On the other hand, going back a little bit further, when they
were fighting DR-DOS, it was known that there were actually bugs
introduced where they actually put a bug in so that if it detected
DR-DOS it would fail.

Dwight: So it's the marketing dirty tricks -- special
placement on the desktop, etc?

Michael: Yes.

Dwight: There has been some confusion about whether Corel is
going to develop a new GUI for Linux or an entire
distribution.

Michael: It's a bit of both really because we are going to edit
the distribution to what's ideal for a mass user.

Dwight: And you're going to package it and sell it?

Michael: Yes. One stop shopping. Because we want to go to the
world's biggest computer manufacturers and say, here's Linux ready
to roll. It's got a beautiful GUI. You turn it on -- it's easier
than Windows even and it's got office apps and it's got graphics
apps, it networks beautifully and you can continue to work with all
your friends who've got Windows files.

Dwight: And besides the GUI itself, which you have already
stated is one of Corel's main focuses for development, what else
are you going to improve?

Michael: A couple of things. Browsing the network so that you
can easily browse for all the system files on the network. Right
now you have to type in parts and be a bit of a hacker. It will be
just like you do in Windows, where you can just find what you are
looking for by browsing with a GUI.

Dwight: Doesn't KDE go in that direction now?

Michael: In that direction. There's not that much missing, but
there's 5% missing that will make it easy instead of difficult --
the mounting of CD-ROMs, the mounting of modems, maybe some print
previewing technology which in our latest office suite is way ahead
of anything Microsoft is doing. And that's a very good easy to use
feature. We could even put that right in the GUI. It's the kind of
stuff you can do for all applications and not just our own because
printing is such a troublesome thing normally, getting it right.
Font management. Net Meeting -- we've got a voice over IP
technology. Voice and video over IP, so we could replicate that
function that nobody else has done yet. And, in general, we're
coming from a space where we're experts with the GUI with our
design for illustration programs, office suite applications and set
up and install of huge programs. So we bring a lot of expertise to
bear on this which the other companies don't really have.

Dwight: Is this going to be a proprietary GUI?

Michael: No. Open-source.

Dwight: Are you going to use some of the GUIs that have been
developed?

Michael: KDE.

Dwight: You're going to start with KDE?

Michael: Yes, and we're talking to Troll Tech about their
libraries and they've got a browser technology that we will
probably include. We've been very good at always working with
what's out there as opposed to reinventing wheels.

Dwight: Are you going to supplant Netscape as the
browser?

Michael: We'll make the appropriate choice, because it's all
open-source and the skill is simply selecting what's best for the
user and that's what it's all about in terms of coming up with
popular, easy to use programs. There's lots of choices you have to
make and you have to have the people who've shown themselves good
at doing that. Red Hat has three full CDs of OS. Maybe that's too
much for most people. Maybe they only need one CD -- but the right
one.

Setting up your Internet connections and setting up your mail
and setting up your home network -- all of that kind of stuff are
areas where people would want ease of use.

Dwight: You seem very sure that you're going to get all of
this stuff done this year.

Michael: Yes, we're good at hitting milestones. Our office suite
is coming out on time; Microsoft is not -- they are delaying again.
And Sun has a history of delay after delay after delay with Java.
We have a history of actually being on time.

Dwight: The application I'm looking for is Ventura
Publisher.

Michael: Ventura's been running five-star reviews right across
the world. So we're very keen on Ventura. XML will become a another
big boost for Ventura. It's already got very strong HTML, XML and
we're looking at another special edition as well, really
highlighting XML DTDs now that that's becoming so hot. The Gartner
Group said, in another three years, XML will be as hot as the Web
itself. Which is pretty encouraging because up to now it's been a
bit of an enthusiast's market. But I guess the business to business
commerce market is going to drive that big time.

Dwight: Will Ventura be one of those applications that is a
Windows application emulated under Wine?

Michael: No, we'll compile it too.

Dwight: It wasn't mentioned as one of the applications that
would run under the Wine APIs?

Michael: No, I didn't mention it because it is version 8 and
everything else is version 9. It won't be this year but early next
year.

Dwight: Thanks very much for talking to me.

Michael: Thanks, Dwight. Thanks for your time.

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